Global payment system bitcoin seems to be trying to recover major losses on Tuesday, following a double-digit percentage lows early in the session, as a global regulatory crackdown weighs on the cryptocurrency market.
The world’s largest digital currency was trading 3.8 percent lower to $7,100, after briefly falling below the $6,000 level earlier. This was its lowest level since October.
Given its current standing, Bitcoin is representing a market cap of about $109 billion. This is nearly one-third of the overall market.
More than $200 billion of its market value has already been taken away in nearly two months. Bitcoin has also lost as much as 70 percent since reaching a peak of almost $20,000 in December.
Its price has climbed 900 percent last year, making it the best performing asset of 2017.
Ethereum also declined by 2.2 percent to $719.80, while ripple went down by 5.7 percent to $0.7011.
Losses in cryptocurrencies have grown heavier in recent weeks, as concerns over a regulatory clampdown have pushed prices lower.
Hitting its highest of $830 billion at the start of January, the global cryptocurrency market has now shrunk to $285 billion. However, a wide a range of investors still believed that the value of cryptocurrencies will recover.
Managing partner Thomas Lee said that they see positive developments approaching, despite the negativities.
Cryptocurrency Crackdown Intensifies
The Bank for International Settlements’ (BIS) new head Agustín Carstens stated that if authorities do not act preemptively, cryptocurrencies could become more interconnected with the main financial system, therefore threatening financial stability.
European Central Bank (ECB) chief Mario Draghi also believed bitcoin to be very risky and entirely speculative.
Carstens has advised central banks to particularly focus on the ties connecting cryptocurrencies to real ones to confirm the relationship was not parasitic. Bitcoin at present is not being accepted by any central bank.
Moreover, BIS new head’s comments might have suggested that regulators are planning for a crackdown on bitcoin.
Carsten’s statement came after a series of warnings on the digital currency from authorities and economists around the globe.
Online social media platform Facebook Inc. has banned bitcoin and other cryptocurrency advertisements on its site as well.
Last week, a number of top financial firms decided to prohibit customers from using their credit cards to buy cryptocurrencies.
The People’s Bank of China (PBoC) is also planning to further strengthen its actions to take out any virtual currency trading platforms or initial coin offerings (ICOs) to prevent financial risks.